LMT's Exclusive 2012 Wage Survey Report: Earnings Down, Staffs Lean

Uncertainty prevails among the respondents to LMT's 2012 Wage Survey and they're being cautious about rehiring or raising wages. On a positive note, more than half saw an uptick in business in the first part of 2012.

Although more than half of respondents to LMT's 2012 Wage Survey saw an uptick in business in the first part of 2012, they're taking a wait-and-see attitude and being cautious about rehiring or raising wages until they're confident the upswing will continue. "With the uncertainty in our industry and the economy, I'm hesitant to do too much—hire, buy equipment, etc. I'm working hard and hoping for stability in all aspects of what we do," says a lab owner from Idaho, echoing the overall sentiment of our respondents (see "How's Business: Q1 2012 Compared to 2011" at right).

In light of the tenuous economy, more than three quarters of survey participants have taken cost-cutting measures that impact their personnel. Nearly half of them have frozen pay raises and about one-third have laid off technicians, cut hours or reduced/eliminated overtime (see "How Lab Owners are Responding to the Economy" above). Consequently, earnings are down overall from 2010; for instance, regardless of experience level, Stain and Glaze Ceramists are earning 9% less and Buildup Ceramists are making 8% less (see "National Average Hourly Wages" chart below).

With smaller staffs, lab owners are heavily cross training, finding it more important than ever to have technicians with multiple skills who can pitch in wherever needed. They're also making sacrifices to keep operations lean, including working overtime to compensate for fewer hands and even taking a pay cut. "I'm keeping employee salaries and hours to a minimum and I've cut my salary by 10%," says a small denture laboratory owner in Florida. "I do more myself than ever before, like a lot of plaster work and repairs and relines which I don't normally handle. I'm working more hours for less salary; go figure."

Some Good News

On a positive note, some laboratory owners are offsetting lower wages with bonuses: the number of labs giving year-end, production/sales or merit bonuses has jumped by 12% in the past two years. In this uncertain economy, some lab owners see bonuses as a safer compensation strategy than being locked into paying a higher salary. "We're holding our salaries the same but being more generous with our bonuses when we come out ahead for the month," says a C&B manager in Nebraska.

In addition, about a quarter of respondents did give raises to all employees and another third gave them to some employees; the average wage increase was 5%. Technicians in the CAD/CAM department are seeing the biggest increases. For instance, an all-around CAD/CAM technician with six to 10 years of experience is now earning $19.79 per hour, $3.41 more than in 2010, and a CAD/CAM technician with 11-15 years of experience is now earning $21.06, a $5.07 boost.

While so many companies are slashing benefits to cut costs in this economy, it's encouraging to note that laboratories are not. Overall, the number of labs providing health insurance, dental/vision insurance, 401(k) plans, paid holidays/vacations and paid sick time is holding steady since 2010 (see "Employee Benefts" chart below).

Here are some other key trends:

Ceramists Still Top Dog: Once again, the All-Around Ceramist is the highest paid technician in the laboratory, earning an average of $22.87 per hour across all experience levels. By years of experience, here's what they earn per hour:

Zero to two: $12.93

Three to five: $16.26

Six to 10: $20.29

11-15: $25.37

15-20: $27.42

Over 20: $28.20

It's Good to be in Implants: Given the specialized knowledge and experience required, it's no surprise that implant technicians are also well compensated. Placing a very close second to the top-paid All-Around Ceramist, Implant Technicians earn an average of $22.55 per hour across all experience levels.

Of all managerial positions, Implant Department Managers earn the most, commanding an hourly average of $27.66 across all experience levels. Removable Department Managers are the second-highest earners at an average of $25.65 per hour.

Office Managers are Highly Valued. Office managers across all experience levels earn an average of $18.20 per hour, making it one of the higher-paid positions in the laboratory. In fact, an office manager with less than two years' experience earns $1.51 more than his technician counterpart. The average hourly wages of office managers by experience level are:

Less than two years: $12.98

Three to five years: $15.88

Six to 10 years: $18.08

Over 10 years: $22.19

Qualified Technicians Still Scarce. Despite a larger applicant pool due to layoffs, many lab owners say they can't find the right employees for their business. In fact, 60% of respondents feel the situation is getting worse. "Newer technicians don't have the basic knowledge needed. They know how to stack porcelain or set teeth based on a single concept/style and find it difficult to use some of the 'old school' techniques. The older technicians are not as adaptable to changing technology and newer materials that are handled differently than what they're used to. It's definitely a double-edged sword that's difficult to sharpen on either side," says Kris Nothwang, Oral Restorative Prosthetics, Rohnert Park, CA.

The Effect of Automation. Touting its productivity and efficiency, 30% of respondents say their direct labor percentage is declining as a result of using digital equipment; 25% say that although it hasn't changed yet, they expect it will decline in the future.

While there's an overall emphasis on cross training in the laboratory, it's especially true in the CAD/CAM department. As lab owners bring in labor-saving digital technology they still need to educate their staffs on how to operate this new equipment and incorporate a digital workflow. For instance, one owner now has his waxers managing the CAD/CAM department and another lab has trained its office staff to scan cases.

This increase in skills is paying off in more ways than one, says Debra Waldrip, Owner, Satellite Dental, Arlington, TX: "Each one of my technicians—from model and die to ceramics—is learning to scan and this has sparked new interest in their jobs. They're all enjoying the new experience and knowledge."